For a growing organisation, one of the biggest questions is how to transition from being a single team to a team-of-teams. An organisation of 5 people is one thing. An org of 20, 100 or even 1000 is another. It requires some deliberate design.

But how do you make that transition? It’s intimidating. Every situation is unique. Your culture, sector, incentives, resource availability, financial position, etc all prevent you from blindly copying other organisations.

There isn’t a standard playbook. But here are some principles to follow.

1. Organise around purpose rather than function

A rapidly growing team will often split into a team-of-teams along functional lines. For example, your team might have a general manager, a couple of developers, an operations person and a marketer. Fast forward to a couple of successful years later. Your “team” is now 100 people. It wouldn’t be surprising to see the marketer running a marketing department of 15 people. Or one of the early developers in charge of a tech department of 20 engineers.

The problem with organising along functional lines is that the company’s big goals are typically multi-functional. Therefore a functional approach inherently requires managers to constantly negotiate with each other for resource and talent. It’s a crippling source of friction.

Instead, you should set out to organise around purpose. If you’re responsible for three different products, then put together cross-functional teams focused on those products.

Keep in mind that this isn’t a hard-and-fast rule. It’s a guiding principle. There will be times, especially when you’re in this awkward phase when you’re bigger than just a team (but smaller than full fledged team-of-teams) where it makes sense to be sort of functionally organised. Don’t break the back of the org to fit this rule.

One nuance to this principle is that a team’s purpose could be to provide a function internally. These are “internal agencies”, which could occur when cross-functional teams only occasionally require a specialised skill (which in aggregate across the company justify an internal team). A common example is legal.

2. Resource each team to follow the 80% rule

Previous posts explain a version of the 80% rule, which states that a team should contain the resources it needs to do 80% of its work (without outside resourcing). Basically this is an extension of the principle of organising around purpose. If you give a team a purpose, then give them the resources.

The subtlety here is that it might be too expensive. A business unit that consistently generates only 100k revenue year after year can’t justify a five person team. The temptation would be to stick just two people on it and say “borrow the rest from others”. This is a cop out. The team is setup for failure.

If it’s too expensive to follow the 80% rule, then increase the scope of purpose rather than setup a crippled team.

3. Hiring should involve multiple teams

Every hire made by a team should involve people from outside that team. Why? First, because teams interact with each other often and you want that interaction to be frictionless. Second, people will move teams over their careers. You’ll want that movement to be welcome rather than disruptive.

In terms of the extra-team checks done on a potential hire, it should be done from a perspective of “would I want this person on my team?”, both from a cultural fit perspective and a skills perspective.

4. Keep clean interfaces between teams

Even with the 80% rule, teams still have to work together a lot. When they do, messy interfaces between them can turn things into a total sh**show.

What do I mean by “interface”? It’s the rules and expectations for how the teams interact. In other words, it’s:

• Who does what
• How do they make requests of each other
• How do they communicate
• Obligations of each side
• Turnaround time
• Workflow
• Etc.

For example, let’s say your company has an in-house legal team (their purpose is to provide timely legal advice). And let’s say they have to sign off on every marketing campaign that a team puts out. When should those requests be sent? How? Via email or an internal ticketing system? How fast should they be responded to? What detail needs to be submitted? Etc.

This won’t all be written in a rulebook. Most of it will be understood rather than documented, based on common culture, good relationships and prior experience working together. And it will evolve. But keeping it clean, you’ll avoid a lot of headache for your teams.

5. Strongly encourage cross-team relationships

Social events, shared kitchens and other spaces, functional networks, cross-team mentorship, office sports teams, etc all have a role to play. And that role is to build trust and awareness between individuals where it wouldn’t happen otherwise. Silos are a real problem of splitting into multiple teams and a variety of cross-team relationship builders go a long way to minimising that risk.

Beyond these principles, there are many other idiosyncratic considerations one should make when transitioning from a single team into a team-of-teams. But this is a good starting point for thinking about it.

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GS Dun provides leadership for new ventures. When you’re at an inflection point and need to do something different, we help. Our name is short for “get sh** done”, so while we can talk the talk, we prefer to keep our meetings short and just get on with it.